New US Administration Brings in New Prospects for African Asset Managers

Recently released filings in Nigeria and Kenya show assets under management for banks, insurers, and pension funds have grown 17% in the past year. This is despite a global backdrop of protectionism and the politicization of development institutions investing in emerging markets. The administration of US president Joe Biden is set to change these conditions, with multilateral policy aimed at cooperation and growth for low- and middle-income countries. African asset managers should prepare for greater flows of capital from abroad into African banks, increased capacity-building support for local financial and insurance institutions, and larger government balance sheets. It is not only financial assets at stake, however. Capitalizing on this opportunity will further shift economic power from Western entities to Black capital holders, advancing broader racial economic justice efforts on the continent. . African asset management has grown quietly but tremendously in recent years. The sector’s role in reshaping the racial power dynamics on the continent should not be underestimated. Local funds have the ability to move the ownership of African companies (and the wealth they create) from abroad to African investors. The return of the US to the multilateral arena as a friendlier, more cooperative actor will support the expansion of local finance and insurance sectors as well as pension funds. The opportunity for African asset managers to capitalize on this geopolitical shift is a hopeful one, with implications well beyond their balance sheets.

SOURCE: QUARTZ AFRICA